Raj Rattan, CHENNAI V. DCIT Non Corporate Circle 10(1), CHENNAI

ITA 3200/CHNY/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4215 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 27-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANATH KUMAR RAHA
• Assessee Lawyers: F C JAIN
• Keywords: Principle of natural justice; Opportunity of cross examination; Wrong claim

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . , ! '# $ , BEFORE SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./ I.T.A.NO.3200/CHNY/2017 / ASSESSMENT YEAR :2012-13 SHRI RAJ RATTAN , 51,LANDONS ROAD, KILPAUK, CHENNAI 600 010. VS. THE DEPUTY COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE-10(1) CHENNAI-34. [PAN ADXPR 0831 L ] ( $% / APPELLANT) ( &'$% /RESPONDENT) / APPELLANT BY : MR.F.C.JAIN,C.A /RESPONDENT BY : MR.SANATH KUMAR RAHA,JCIT,D.R ! ' #$% / DATE OF HEARING : 26 - 0 9 - 201 8 &' #$% / DATE OF PRONOUNCEMENT : 08 - 1 0 - 201 8 ( / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-12, CHENN AI IN ITA NO.22/CIT(A)-12/2015-16 DATED 20.10.2017 FOR THE A SSESSMENT YEAR 2012-13. ITA NO.3200/CHNY/2017 :- 2 -: 2. SHRI F.C.JAIN REPRESENTED ON BEHALF OF THE ASSE SSEE AND MR.SANATH KUMAR RAHA REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY LD.A.R THAT THE ONLY ISSUE IN THE ASSESSEES APPEAL WAS AGAINST THE ACTION OF LD.CIT(A) IN CONFI RMING THE DISALLOWANCE OF CLAIM OF DEDUCTION U/S.35(1)(II) OF THE ACT IN RESPECT OF THE DONATION OF ` 20 LAKHS GIVEN BY THE ASSESSEE TO M/S.HERBICURE HEALTHCARE BIO-HERBAL RESEARCH FOUNDATION (NHBHRF), KOLKATA (PAN:AABCH 4849 J) AND HAD CLAIMED DEDUCTION OF ` 35 LAKHS U/S.35(1)(II) OF THE ACT. IT WAS A SUBMISSION THAT THE LD. ASSESSING OFFICER HAD DISALLOWED THE CLAIM OF DEDUCTION ON TH E GROUND THAT THERE WAS A SURVEY ON THE PREMISES OF NHBHRF ON 27.01.201 5 AND THE ONE FOUNDER DIRECTOR OF NHBHRF, SHRI SWAPAN RANJAN DAS GUPTA WAS EXAMINED ON OATH, WHO STATED THAT NHBHRF HAS BEEN G IVING BOGUS ENTRY IN THE FORM OF BOGUS DONATIONS ON A COMMISSIO N OF 5%. IT WAS A SUBMISSION THAT THE LD. ASSESSING OFFICER HAD RELIE D UPON THE STATEMENT RECORDED ON 27.01.2015. IT WAS A FURTHER SUBMISSION THAT THE SAID RECORDED STATEMENT HAS NOT BEEN PROVIDED TO THE ASS ESSEE FOR CROSS EXAMINATION. IT WAS A PRAYER THAT THE DISALLOWANCE WAS LIABLE TO BE DELETED. ITA NO.3200/CHNY/2017 :- 3 -: 4. IN REPLY, LD.D.R VEHEMENTLY SUPPORTED THE ORDER S OF THE LD. ASSESSING OFFICER AND THE LD.CIT(A). IT WAS A SUBM ISSION THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE CO-ORDI NATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S.MEGATRENDS INC., CHENNA I VS. THE ACIT, CHENNAI IN ITA NOS.417 & 740/CHNY/2017 VIDE ORDER D ATED 05.03.2018 WHEREIN THE ISSUE HAS BEEN HELD AS FOLLOWS:- 11. COMING TO THE ISSUE OF THE DONATIONS IN RESPEC T OF WHICH, THE ASSESSEE HAS CLAIMED WEIGHTED DEDUCTION U/S.35(1)(II) OF THE ACT, IT IS NOTICED THAT THE AO HAS DISBELIEVED THE DONATIONS ON THE BASIS OF STATEMENT RECORDED FR OM ONE MR.SWAPAN RANJAN DAS GUPTA, ONE OF THE MAJOR SHAREH OLDERS OF HHBHRF AND ON ACCOUNT OF A LETTER FROM CROSS AND IN RESPECT OF M/S.SHGPH ON THE BASIS OF SURVEY REPORT. IT IS NOTICED THAT THE ONUS OF PROVING THE GENUINENESS OF THE DONATION RESTS ON THE ASSESSEE. HOWEVER, THE AO HA S TAKEN UP HIMSELF THE ONUS TO DISPROVE THE GENUINENESS OF THE DONATION MUCH BEFORE THE ASSESSEE HAS PROVED THE GENUINENESS OF THE DONATION. WHEN AN ASSESSEE STEPS FORWARD TO GIVE D ONATIONS OF RS.1.25 CRS, RS.25.00 LAKHS, RS.1.45 CRS. RESPECTIV ELY, THE ASSESSEE WOULD HAVE ADEQUATE REASONS TO GIVE SUCH D ONATIONS. HERE, IT IS NOTICED THAT THE ASSESSEE HAS NOT BEEN GIVEN ANY OPPORTUNITY TO PROVE THE GENUINENESS BUT THE ASSESS MENT HAS BEEN MADE BASED ON THE EVIDENCES COLLECTED BY THE R EVENUE IN THE COURSE OF THE SURVEY CONDUCTED ON THE RESPECTIV E ORGANIZATIONS. THIS IS NOT PERMISSIBLE. THIS BEIN G SO, IN THE INTEREST OF NATURAL JUSTICE, THE ISSUE OF THE GENUI NENESS OF THE DONATIONS ARE RESTORED TO THE FILE OF THE AO FOR RE -ADJUDICATION. THE AO MUST KEEP IN MIND THAT THE ONUS OF PROVING T HE DONATIONS ARE ACTUALLY DONATIONS AND NOT ACCOMMODAT ION ENTRIES AND THAT THE SAID ORGANIZATIONS WERE ELIGIB LE FOR CLAIMING DEDUCTION U/S.35(1)(II) OF THE ACT RESTS O N THE ITA NO.3200/CHNY/2017 :- 4 -: ASSESSEE. IF THE AO DOES HAVE ANY EVIDENCE TO THE C ONTRARY, IT IS TO BE PUT TO THE ASSESSEE FOR HIS REBUTTAL. THE ASSESSEE SHALL PRODUCE THE RECIPIENTS OF THE DONATION FOR EXAMINAT ION ALONG WITH THE EVIDENCES TO PROVE THE RECEIPT OF THE DONA TION. THE INTERNAL COMMUNICATIONS OF THE REVENUE ARE EVIDENCE S FOR DRAWING AN OPINION ON POSSIBLE WRONG CLAIMS BUT THE Y ARE NOT THE FINAL EVIDENCE. THIS BEING SO, THE ISSUE OF TH E DONATION IN THESE APPEALS ARE RESTORED TO THE FILE OF THE AO FO R RE- ADJUDICATION AFTER GRANTING THE ASSESSEE ADEQUATE O PPORTUNITY TO PROVE THE GENUINENESS OF THE DONATION. LD. DR SUBMITTED THAT THE ISSUE CAN BE RESTORED TO THE FILE OF AO FOR RE-ADJUDICATION IN LINE WITH THE DECISION OF THE TR IBUNAL CITED SUPRA. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE ASSESSMENT ORDER IN THE ASSESSEES CASE CLEARLY SHO WS THAT OPPORTUNITY OF CROSS EXAMINATION HAS NOT BEEN GRANTED TO THE AS SESSEE. A PERUSAL OF THE DECISION OF CO-ORDINATE BENCH OF THIS TRIBUN AL IN THE CASE OF M/S.MEGATRENDS INC., REFERRED TO SUPRA, CLEARLY SHO WS THAT THIS ISSUE HAS BEEN RESTORED TO THE FILE OF LD. ASSESSING OFFI CER FOR RE-ADJUDICATION AFTER GRANTING THE ASSESSEE ADEQUATE OPPORTUNITY TO PROVE THE GENUINENESS OF THE DONATION. CONSIDERING THESE FAC TS, WE ARE OF THE VIEW THAT THE ISSUE IN THIS APPEAL IS LIABLE TO BE RESTORED TO THE FILE OF LD. ASSESSING OFFICER FOR RE-ADJUDICATION AFTER GRA NTING THE ASSESSEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE ITS CASE. IF THE LD. ASSESSING OFFICER PROPOSES TO RELY IN ANY EVIDENCES, WHICH IS AGAINST THE ITA NO.3200/CHNY/2017 :- 5 -: ASSESSEE, THE SAME SHALL BE PUT TO ASSESSEE FOR CRO SS-EXAMINATION AND REBUTTAL. UNDER THESE CIRCUMSTANCES, THE ISSUE IN T HIS APPEAL APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 08 TH OCTOBER, 2018, AT CHENNAI. SD/ - SD/ - ( () . +,+ ) ( ABRAHAM P GEORGE) ! / ACCOUNTANT MEMBER ( $ ) (GEORGE MATHAN) ) ! / JUDICIAL MEMBER . ' / CHENNAI / / DATED: 08 TH OCTOBER, 2018. K S SUNDARAM 0 #12 3 2# / COPY TO: 1 . / APPELLANT 3. ! 4# () / CIT(A) 5. 267 #8 / DR 2. / RESPONDENT 4. ! 4# / CIT 6. 79 :' / GF